The second forum convened by the Mill Valley Chamber of Commerce on the issue of sewer fees for restaurants within the City of Mill Valley yielded a dose of both good news and bad news for restaurant owners and their property owners.

The good: The consultant hired by the City to conduct an analysis of the City’s sewer rates, Greg Clumpner of NBS Consultants, said he would be recommending to the City Council in May to reduce the “strength factor” used to calculate the sewer fees for restaurants.

The bad: In the ongoing efforts by the Sewerage Agency of Southern Marin (SASM) to upgrade its aging facilities, the City is projected to increase sewer rates by at least 20 percent in 2016-2017, with a lesser increase in the subsequent four years. So while restaurant owners will see their “strength factor” used to calculate their sewer fees go down, their overall fees will go up.

The Chamber convened the forum with Clumpner and City officials this week to continue to address concerns about steep hikes in sewer fees in recent years, hikes that some said place an unfair burden on local restaurants. Downtown commercial property owner Mike Walsh, whose family owns the Bungalow 44 building as well as the L-shaped building that wraps around it on Sunnyside and East Blithedale avenues, containing both Kitchen Sunnyside and Pearl’s Phat Burgers, said the restaurant-specific sewer fees on his annual property tax bill increased by as much as 1000 percent since the City shifted to a “flow-based” rate structure in 2012.

“The impact on restaurants was just enormous,” Walsh said.

The issue stems from the City Council’s approval in 2011 of sewer rate hikes for six years, with City officials citing rising costs from SASM, the joint powers agency that collects and treats wastewater for approximately 28,000 residents in Mill Valley and five neighboring sanitary districts. The City’s rate structure at that time was among the lowest in Marin County.

The lion’s share of the rate hike went towards an overhaul of a large chunk of the city’s 59 miles of sewer pipes, much of which dates back some 50 years. An EPA-mandated video survey of 12.6 miles of the system found it laden with a variety of defects, including cracks, holes, blockages and tree root intrusion.

One year later, at the urging of many residents, the Council approved a shift to what City officials say is a more equitable "flow-based" system by which residents and business are charged based on how much water they consume and thus discharge into the sewers. During that process, the City applied higher rates based on the “strength factor” of the water discharged by different types of businesses, with restaurants paying a higher rate than retail shops and offices, for instance.

That shift led many restaurants to see huge spikes in their sewer fees, which are applied to property tax bills and primarily passed on to tenant restaurants. For example, Bungalow 44 saw its sewer fees jump from $4,000 in 2007-2008 to $11,000 in 2014-15.

At the forum in January and again this week, restaurant and property owners argued that the City hadn’t taken into consideration two factors: 1) that restaurants have gotten decidedly more efficient with their discharge via things like composting, highly efficient dishwashing machines and the use of grease traps and 2) that restaurants serve thousands of meals per week, thus vastly reducing the amount of discharge from homes throughout Mill Valley.

City officials and Clumpner said they were convinced that those factors warranted a reduction in the strength factor attributed to restaurants. But they noted that because of the much-needed overhaul of SASM’s wastewater treatment plant, sewer rates for all users, residents and businesses, will be going up in subsequent years.

The issue is expected to be on the agenda of the Mill Valley City Council on May 23.